BITCOIN MINING FAQS

Bitcoin Mining Faqs are this! Bitcoin is making a big splash on the front pages of the media these days. Needless to say, you’re probably wondering what the hoopla is about! No surprise… most of your questions can be answered by notes given below and if not, leave a comment. Therefore…

Bitcoin is an innovative payment network and a new kind of money

The following videos are a good break for knowing how bitcoin works and a little about its long term impact: Thus…

For some more great intro videos check out Andreas Antonopoulos’s YouTube playlists, he is a known bitcoin educator out there today. Also have to give mention to James D’Angelo’s Bitcoin 101 Blackboard series. Typically…

Lots of additional video resources can be found at the videos wiki page or /r/BitcoinTV. As such…

Key properties of bitcoin

  • Limited Supply – There will only ever be 21,000,000 bitcoins created and they are issued in a predictable fashion, you can view the inflation schedule here. Once they are all issued Bitcoin will be truly deflationary. The halving countdown can be found here.
  • Open source – Bitcoin code is fully auditable. You can read the source code yourself here.
  • Accountable – The public ledger is transparent, all transactions are seen by everyone.
  • Decentralized – Bitcoin is globally distributed across thousands of nodes with no single point of failure and as such can’t be shut down similar to how Bittorrent works.
  • Censorship resistant – No one can prevent you from interacting with the bitcoin network and no one can censor, alter or block transactions that they disagree with, see Operation Chokepoint. Additionally…

NO CHARGBACKS With Bitcoin

  • Push system – There are no chargebacks in bitcoin because only the person who owns the address where the bitcoins reside has the authority to move them.
  • Low fee – Transactions fees can vary between a few cents and a few dollars depending on network demand and how much priority you wish to assign to the transaction. Most wallets calculate the fee automatically but you can view current fees here.
  • Borderless – No country can stop it from going in/out, even in areas currently unserved by traditional banking as the ledger is globally distributed.
  • Trustless – Bitcoin solved the Byzantine’s Generals Problem which means nobody needs to trust anybody for it to work.
  • Pseudonymous – No need to expose personal information when purchasing with cash or transacting.
  • Secure – Encrypted cryptographically and can’t be brute forced or confiscated with proper key management such as hardware wallets.
  • Programmable – Individual units of bitcoin can be programmed to transfer based on certain criteria being met
  • Nearly instant – From a few seconds to a few minutes depending on need for confirmations. After a few confirmations transactions are irreversible.
  • Peer-to-peer – No intermediaries with a cut, no need for trusted third parties.
  • Portable – Bitcoins are digital so they are easier to move than cash or gold. Additionally… they can even be transported by simply remembering a string of words for wallet recovery.
  • Scalable – Each bitcoin is divisible down to 8 decimals allowing it to grow in value while still accommodating micro-transactions.
  • Designed Money – Bitcoin was created to fit all the fundamental properties of money better than gold or fiat. As such…

BITCOIN’s Footprints

Some excellent writing on Bitcoin’s value proposition and future can be found here. Bitcoin statistics can be found herehere and here. Developer resources can be found here and here. Peer-reviewed research papers can be found here. The number of times Bitcoin was declared dead by the media can be found here. Scaling resources here, and of course the whitepaper that started it all.

Where can I buy bitcoins?

BuyBitcoinWorldwide.com and Howtobuybitcoin.io are helpful sites for beginners. You can buy or sell any amount of bitcoin and there are several easy methods to purchase bitcoin with cash, credit card or bank transfer. Some of the more popular resources are below, also, check out the bitcoinity exchange resources for a larger list of options for purchases.

Bank Transfer Credit / Debit card Cash
Coinbase Coinbase LocalBitcoins
Gemini Bitstamp LibertyX
GDAX Bitit Mycelium LocalTrader
Bitstamp Cex.io BitQuick
Kraken CoinMama WallofCoins
Xapo BitcoinOTC
Cex.io
itBit
Bitit
Bitsquare

Here is a listing of local ATMs. If you would like your paycheck automatically converted to bitcoin use Cashila or Bitwage.

Note: Bitcoins are valued at whatever market price people are willing to pay for them in balancing act of supply vs demand. Unlike traditional markets, bitcoin markets operate 24 hours per day, 365 days per year. Preev is a useful site that that shows how much various denominations of bitcoin are worth in different currencies. Alternatively you can just Google “1 bitcoin in (your local currency)”.

Securing your bitcoins

With bitcoin you can “Be your own bank” and personally secure your bitcoins OR you can use third party companies aka “Bitcoin banks” which will hold the bitcoins for you.

  • If you prefer to “Be your own bank” and have direct control over your coins without having to use a trusted third party, there are many software wallet options here. If you want easy and secure storage without having to learn computer security best practices, then a hardware wallet such as the Trezor or Ledger is recommended. A more advanced option is to secure them yourself using paper wallets generated offline. Some popular mobile and desktop options are listed below and most are cross platform.
Android iOs Desktop
Mycelium BreadWallet Electrum
CoPay AirBitz Armory
  • If you prefer to let third party “Bitcoin banks” manage your coins, try Coinbase or Xapo but be aware you may not be in control of your private keys in which case you would have to ask permission to access your funds and be exposed to third party risk.

Another interesting use case for physical storage/transfer is the Opendime. As such… Opendime is a small USB stick that allows you to spend Bitcoin by physically passing it along so it’s anonymous and tangible like cash. Therefore…

Note: For increased security, use Two Factor Authentication (2FA) everywhere it is offered, including email!

2FA requires a second confirmation code to access your account. This can be done from a text message or app, making it much harder for thieves to gain access. Google Authenticator and Authy are the two most popular 2FA services, download links are below. Make sure you create backups of your 2FA codes.

Google Auth Authy
Android Android
iOS iOS

Where can I spend bitcoins?

A more comprehensive list can be found at the Trade FAQ but some more commons ones are below.

Store Product
Gyft Gift cards for hundreds of retailers including Amazon, Target, Walmart, Starbucks, Whole Foods, CVS, Lowes, Home Depot, iTunes, Best Buy, Sears, Kohls, eBay, GameStop, etc.
Steam, HumbleBundle, Games Planet, itch.io, g2g and kinguin For when you need to get your game on
Microsoft Xbox games, phone apps and software
SpendabitThe Bitcoin ShopOverstockDuoSearchThe Bitcoin Directory and BazaarBay Retail shopping with millions of results
ShakePay Generate one time use Visa cards in seconds
NewEgg and Dell For all your electronics needs
CashilaBitwa.laCoinbillsPiixpayBitbill.euByllsCoins.phBitrefillPey.deLivingRoomofSatoshiHyphen.toCoinsferGetPaidinBitcoinCoins.co.th, More #1#2 Bill payment
FoodlerMenufyTakeawayThuisbezorgd NLPizza For Coins Takeout delivered to your door!
ExpediaCheapairLotDestiniaBTCTripAbitskySkyToursFluege the Travel category on Gyft and 9flats For when you need to get away
BoltVMBitHost VPS service
CryptostormMullvad, and PIA VPN services
NamecheapPorkbun For new domain name registration
Stampnik and GetUSPS Discounted USPS Priority, Express, First-Class mail postage
Reddit Gold Premium membership which can be gifted to others

Coinmap99Bitcoins and AirBitz are helpful to find local businesses accepting bitcoins. A good resource for UK residents is at wheretospendbitcoins.co.uk.

There are also lots of charities which accept bitcoin donations, such as WikipediaRed CrossAmnesty InternationalUnited WayACLU and the EFF. You can find a longer list here.

Merchant Resources

There are several benefits to accepting bitcoin as a payment option if you are a merchant;

  • 1-3% savings over credit cards or PayPal.
  • No chargebacks (final settlement in 10 minutes as opposed to 3+ months).
  • Accept business from a global customer base.
  • Increased privacy.
  • Convert 100% of the sale to the currency of your choice for deposit to your account. In addition… choose to keep a percentage of the sale in bitcoin if you wish to begin accumulating it.